Put down the 10-K filings and the stock screeners. It's time to take a break from the traditional methods of generating investment ideas. Instead, let the crowd do it for you.
From hedge funds to individual investors, scores of market participants are turning to social media and market data to figure out which stocks are worth watching. It's a concept that's known as "crowdsourcing," and it uses the masses to identify emerging trends in the market.
Big picture, the market is looking heavy this afternoon. While the big stock indices are only down slightly as I write, almost two-thirds of the individual stocks in the S&P 500 are in the red. And, as always, some important stories are emerging in the most heavily-traded stocks on the market right now.
More importantly, those market-moving narratives are creating trading opportunities for investors who are paying attention.
So, today, we'll leverage the power of the crowd to take a look at some of the most active stocks on the market...
- Nearest Resistance: $7.99
- Nearest Support: $6.40
- Catalyst: Atwood Acquisition
Leading things off today is $2 billion offshore contract driller Ensco plc (ESV) . Ensco is down more than 5% on huge volume following news that the firm is acquiring Atwood Oceanics (ATW) in a stock deal worth approximately $863 million. Atwood shareholders will receive 1.6 shares of Ensco for every share of Atwood they own. That represented a 33% premium to Atwood's pre-announcement price tag.
Ensco's shares aren't reacting favorably to the deal. ESV has been stuck in a well-defined downtrend for all of 2017, and they're continuing to fall here. In fact, shares are testing the bottom of their trend channel in Tuesday's session, which means we're either going to see an upward correction here, or an acceleration of the selloff. Keep a close eye on where ESV ends today's session, but it makes sense to avoid the long-side until shares can crack the top of their downtrend.
Ford Motor Co.
- Nearest Resistance: $11.20
- Nearest Support: $10.80
- Catalyst: Technical Setup
2017 has been a tough year for Ford Motor Co. (F) - since the start of the calendar year, this automaker has shed about 9% of its market value, trailing the S&P 500 by about double that. Thing is, Ford's price trajectory could finally be about to change (in the short-term, at least). Shares are working on carving out a near-term bottom this week.
The pattern in play right now for Ford is an inverse head and shoulders pattern, a bullish reversal setup that signals exhaustion among sellers. The pattern triggers a buy signal with a push through $11.20. It's worth noting that a breakout above $11.20 would also coincide with a break through the downtrend that's harangued Ford's share price since mid-March. That's extra evidence that buyers could be building strength here.
- Nearest Resistance: $8
- Nearest Support: N/A
- Catalyst: Analyst Downgrade
$2.7 billion oil and gas company Whiting Petroleum (WLL) is making our list of the market's most actively-traded stocks this afternoon, falling almost 10% after a downgrade from Goldman Sachs. Goldman cut Whiting's rating from neutral to sell, arguing that the firm is likely to fall short of investors' expectations on volume growth and deleveraging its stretched balance sheet.
While today's drop is fueled by the cut, the size of the move is being impacted by the technicals. Whiting violated key support at $8 at the open this morning, a breakdown signal that also opened up substantial downside risk. Simply put, shares could have further to fall from here. Caveat emptor.
- Nearest Resistance: $3.60
- Nearest Support: $3.10
- Catalyst: Analyst Upgrade
Rounding out our list of active stocks today is $3 billion social game developer Zynga Inc. (ZNGA) . Zynga is up 3% and change today following news of an analyst upgrade from Piper Jaffray. Analyst Michael Olson upgraded the company to overweight, putting a $4 price target on shares. The boost follows an upgrade from Bank of America Merrill Lynch earlier this month.
Technically speaking, it's not hard to see the momentum in Zynga. Shares are up 31% in the last three months, and they're testing new 52-week highs as of this writing. Near-term the $3.60 price level that's being tested today could signal a secondary breakout signal if Zynga can push materially through it today. If you decide to jump on this trade here, keep risk-management in mind - the nearest meaningful support level in Zynga doesn't come into play until down at the $3.10 level.